Brussels, 18/12/2015 (Agence Europe) - The Spanish tax lease system (RELF), which allows shipping companies to buy ships from Spanish ship-builders at a reduced cost, does not confer selective economic advantages on economic interest groups (IEG) and certain investors. It is therefore not unlawful state aid under Internal Market rules on a level playing field for competition, as opposed to what the European Commission ruled in a decision in July 2013 (2014/200/EU).
In this ruling, issued on Thursday 17 December in combined cases T-515/13 and T-719/13, the European General Court, to which the case was sent by Spain and two private operators, annulled the decision in which the Commission ordered the recovery of aid from various investors that were alleged to have received selective advantages from RELF, on the grounds that the Commission had not provided sufficient evidence for its decision.
The system in question was in place until 2012 (it has since been amended and is now ruled lawful by the Commission). It allowed the use of a legal and financial scheme to finance the building of a ship in Spain and its sale shipping companies at a reduction: a bank set up a leasing company and economic interest group (IEG) as an intermediary between the shipyard and the purchaser. The IEG was set up by the bank, which then sold shares to investors wishing to gain tax advantages (a reduction of their tax basis). The leasing company bought ships and then sold them at a reduced price to the IEG through leasing contracts, and the IEG sold them on to a company at a reduced net price. This scheme generated tax advantages for investors since a substantial portion (85-90%) was returned to the shipping company in the form of discounts on its ships. This was done using five tax measures applicable to leasing contracts (accelerated and early amortisement of certain goods) to GIG (tax transparency) and shipping activities (special tax system by tonnage).
The Commission says these measures provided selective state aid since they gave benefits to EIG and certain investors. In fact, they allowed the early, accelerated amortisement of ships right from the start of the construction phase, which generated losses for the EIG. As a result of tax transparency these losses were allocated for tax purposes to investors, allowing them to reduce their tax basis. Two other measures included in the scheme meant that surplus value obtained by EIG from the sale of ships did not need to be taxed, thus allowing investors to keep the benefits of the tax losses.
The General Court says that the Commission committed errors: - as a result of EIG tax transparency, the tax measures applied to them under RELF were not of benefit to their members, the investors so EIG as such did not benefit from state aid; and the economic advantage for the investors was not selective. Despite the existence of an authorisation system, the advantages provided by RELF were available, under the same conditions, to any investor who bought shares in the EIG set up by the banks; - the Commission did not provide a sufficient statement of reasons for the fact that the tax advantages to investors from RELF risked damaging competition and thus affect trade between the member states. (Original version in French by Francesco Gariazzo)